Overview

America's services sector may have been hurt by Hurricane Katrina, but the storm helped manufacturing in September. The Institute for Supply Management's services index fell sharply to 53.3 from 65.0 in August. However, the index of factory output climbed to 59.4, from 53.6 in the previous month, lifted by the demands of reconstruction along America's Gulf coast.

Consumer prices in the euro area rose by 0.5% in September, leaving them 2.5% higher than a year ago, according to preliminary estimates. Retail sales were stronger than expected, rising by 0.9% in August, after declining by 0.5% in July. The purchasing managers' index for manufacturing moved up to 51.7 in September from 50.4 in August. The services index also beat forecasts, rising to a 14-month high of 54.7. However, the unemployment rate worsened in August to 8.6%, from 8.5% in July.

Japan's Tankan survey of business confidence indicated more optimism in September, but fell short of expectations. The index for large manufacturers rose by only one point, to 19.0. Household spending, after recent declines, increased by 3.2% in August. The unemployment rate also improved to 4.3% in August, from 4.4% a month earlier.